Tesla Motors Inc <TSLA.O>, led by billionaire Elon Musk, on Wednesday said plans for its new lithium-ion battery plant were on track but its outlook for the second quarter disappointed some investors, sending shares down more than 6 percent in after-hours trading.
Tesla posted a better-than-expected first-quarter operating profit and said its operating automotive gross margins in the current quarter would increase slightly. However, S&P Capital IQ analyst Efraim Levy called the outlook a disappointment, saying investors had hoped for a better progression.
The Palo Alto, California-based company reported a first-quarter net loss compared with last year’s first-ever quarterly profit.
The company said it would spend up to $850 million this year to boost production capacity of its Model S luxury electric sedan, develop the Model X crossover vehicle and start construction on the new battery plant, dubbed the “gigafactory.” It said that would leave the company with a negative free cash flow for the year.
The company said the project to begin production of lithium-ion batteries at the plant is on course for 2017.
“We have not yet finalized the ultimate location for the gigafactory and we are going to start work on at least two locations in parallel in order to minimize risk of delays arising after groundbreaking,” Musk said in a letter to shareholders posted online.
Excluding one-time items, Tesla reported a first-quarter profit of 12 cents a share, two cents better than what analysts polled by Thomson Reuters I/B/E/S had expected. However, the results included a currency gain of $6.7 million.
Shares in Tesla fell to $187.57 in after-hours trading.
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